The euro rose in European trading on Thursday against a basket of major currencies, remaining in positive territory for a second consecutive session against the US dollar as demand for the greenback as a safe-haven asset eased, particularly after US Central Command announced the conclusion of its military operations against Iran.

Following the recent surge in oil prices triggered by renewed tensions in the Strait of Hormuz, expectations have increased that the European Central Bank could deliver one additional 25-basis-point interest rate hike before the end of the year.

The Price

The euro rose more than 0.1% against the US dollar to $1.1430, from today's opening level of $1.1416, after touching an intraday low of $1.1414.

The euro closed Wednesday's session up by less than 0.1% against the dollar, marking its fourth daily gain in the past five sessions, supported by expectations of higher European interest rates.

US dollar

The dollar index fell 0.1% on Thursday, extending losses for a second straight session and reflecting broad weakness in the US currency against a basket of major currencies.

The decline came as demand for the dollar as a safe-haven asset slowed after reports suggested that the latest US-Iran military exchanges were unlikely to trigger a renewed war in the Middle East.

Global oil prices

Oil prices fell by around 0.5% on Thursday, retreating from two-week highs amid profit-taking and corrective trading, while reports indicated that shipping traffic through the Strait of Hormuz continued uninterrupted.

Latest developments in the Iran conflict

US Central Command (CENTCOM) announced the conclusion of the current round of airstrikes on military targets inside Iran.

The US strikes focused on coastal cities and facilities along the Strait of Hormuz, destroying two maritime traffic control towers and two piers at the strategic Port of Chabahar.

The US military said it had destroyed more than 60 Islamic Revolutionary Guard Corps naval attack boats, while also targeting air defense systems and coastal radar installations.

Iran's Revolutionary Guard responded by launching ballistic missiles and drones targeting 85 US military sites in Bahrain and Kuwait.

Iranian Parliament Speaker Mohammad Bagher Ghalibaf said Tehran would not back down, stressing that the Strait of Hormuz would only reopen under "Iranian arrangements and procedures," not under US threats.

US President Donald Trump said the American strikes were carried out in response to Iranian attacks on commercial vessels transiting the Strait of Hormuz.

European interest rates

Money markets are currently pricing around a 10% probability of a 25-basis-point European Central Bank rate hike at the July meeting.

The probability of a 25-basis-point ECB rate hike in December has risen to above 90%.

Investors are awaiting additional eurozone data on inflation, unemployment, and wage growth to reassess those expectations.